Ethereum co-founder and the current head of the Cardano project Charles Hoskinson has recently claimed that the so-called 20th century economic model with centralized leanings is dead. He made these comments during a recent youtube livestream.
20th century was the epitome of the centralized model. Previously, gold and other valuable metals and assets had been the standard currency bearers but the 20th century saw the rise of powerful centralized banking systems. These central banks controlled the economy through fiat (paper) currency manipulation and determination of the interest rate to control the liquidity in the market. This centralized hierarchical system was developed by a few powerful countries through a series of treaties including the USA, Great Britain, France, Germany and others.
Their Time is Up
According to Hoskinson’s criticism, this system was built in place for a world with no Information Technology and blockchain revolution going on. He believes the time for the centralized model is up and with it its unfair practices as well.
Hoskinson said:
“What we are looking at right now is the unraveling of the economic order of the 20th century… Winners and losers that had certain assumptions about how power should work, how money should work, how credit should work, how finance should work, how information needs to flow. And this economy was sustainable and stable when information was not instantaneous. And when it was totally acceptable to have empires, meaning one or two nation-states being supreme above all others and establishing all the rules and regulations.”
Hoskinson even followed up on the future of the European Union itself. He believes that with Brexit, other countries are slowly going to break away from the economic and political union and the process will likely start with Italy.
The Factors Currently Affecting Centralized Banking
He also blamed various other factors for the continuing diminishing of the centralized banking model including the US national debt which has increased several fold in the recent years. Other countries have also accumulated large amounts of national debt and are likely to face even further issues with the centralized model in the near future.
Hoskinson details the lack of trust on the centralized model as another initiative for a decentralized future. He underlined the response of the current Coronavirus scare and said that scientists and experts had been warning governments extensively regarding a potential flu pandemic and the governments did close to nothing to prepare for it. In many ways, the centralized model actually helped the virus spread and thus is putting millions of lives in danger throughout the globe.
The Future of Crypto
But, while Hoskinson criticized and declared the centralized model dead, he also gave deeper insight into the existence and meaning of the cryptocurrency world. He believes that crypto is not a way to have fast returns and the price of Bitcoin itself but rather a part of the decentralized currency of the future. Its best work is in disrupting the outdated centralized model and offering alternative solutions to it.
Hoskinson delivered bold statements and appealed for calm amongst the crypto community. He believes cryptocurrencies are much more resilient than traditional markets and have weathered heavier storms. So, they are likely to survive this in the near future because of the pandemic threat posed by Coronavirus.